1. Field of the Invention
Embodiments of the present invention relate to computer-implemented methods and systems for identifying and reporting deviations of business document terms in business documents from established policies that govern business documents between the enterprise and third parties, such as vendors, suppliers, partners or customers, for example.
2. Description of the Prior Art and Related Information
Conventionally, companies have many standard business documents that they use to define business relationships with their customers, vendors and partners. Most companies store these business documents (such as contracts, for example) as text documents on a file server. Some store hard copies in filing cabinets. To help define and enforce uniform standards across an enterprise and to effectively regulate the enterprise's dealings with its customers, vendors and partners, it is important to insure that the terms of the business document are compliant with pre-established corporate standards and policies, both to promote uniformity across its business document base and to insure that the business documents are not authored or modified on an ad-hoc basis by its procurement group, sales or marketing forces. Indeed, non-standard language and terms may expose a company to risk and have adverse financial impact especially in terms of revenue recognition. Recent regulations such as Sarbanes-Oxley have underscored the need to maintain more control on the contracting process, so that management is aware of non-standard contracts and their financial implications. For example, company ABC may enter into a contract that specifies that company ABC will supply a predetermined number of widgets and that the customer will pay for such widgets on a NET-30 basis. Such payment terms may be mandated by company ABC's corporate policy, with the intent of maintaining control over the company's outstanding receivables. Moreover, to mitigate risk, company ABC's policy concerning such contracts may further specify that any contracts where payments terms are specified to be different than Net 30 must be identified and that such deviations from corporate contract policy require special approval. Company ABC's policy may also specify that that sales discounts cannot be greater than 10% off list price. Therefore, if a sales person on company ABC's sales force were to negotiate a contract that binds company ABC to supply widgets at a 15% discount, payable on a NET-45 day basis, such a contract would significantly deviate from company ABC's established policy for such contracts by violating at least the aforementioned discount and payment terms provisions thereof.
Currently, companies handle such deviations from corporate policies with manual processes. Employees involved in the contracting process (sales representatives, buyers, contract administrators, etc.) must be well trained in corporate policies and contracting practices, and must manually review and identify any business terms or contract clauses that do not adhere to standards in some way. Moreover, evaluating business documents manually is a wholly subjective process, as it is based upon the reviewer's interpretation and understanding of the business document clauses. Such subjective evaluations, moreover, are not likely to be uniformly applied across all business documents (or even within a single business document) that cross the business document administrator's desk. In fact, such manual processes are very error prone and in many cases result in business documents that may be signed without fully considering or understanding the risks posed by deviations from the pre-established business document policies. Moreover, business documents that do not conform to the enterprise's established policies may negatively affect the enterprise's supply chain or collections and may expose the enterprise to unwanted or undue legal liability.
From the foregoing, it may be appreciated that improved methods and systems for identifying and reporting such deviations from established policies for contracts, legal agreements and other legally binding business documents are needed.